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I think maybe I found a way to use Firecalc to calculate the longer-term effect on my safe withdrawal spending caused by the shorter-term tax payments from my TIRA-to-Roth conversion program (I'm 60 years old now and I'd be paying annual conversion taxes up to the top of the 15% tax bracket for the next 10 years, then I'd stop converting when TIRA MRD's start at age 701/2):
On the first page ("How Much Will You Spend?"), I entered the target amount of my conversion tax payments as an "Increase" of my withdrawal starting this year (2006). I check the inflation-adjusted checkbox in order to keep up with the future 15% bracket creep.
Then I enter the same number (the target amount of my conversion tax payments) as a "Decrease" in my withdrawal starting in the year of 2016 (10 years later). And I ask Firecalc for my results in terms of "how much (I) spend each year."
(Question: should I check the inflation-adjusted checkbox for this "Decrease?" It makes a significant difference in the results if this "Increase" and "Decrease aren't both inflation-adjusted (or not). So should I always keep this withdrawal "Increase" and "Decrease" the same in this regard, that is, they both should be inflation-adjusted or both not be inflation-adjusted? This is an important distinction, I think.)
The results show that the decrease in my safe annual withdrawal spending over the next 30 years is equal to roughly one-half of the conversion tax payments I'd be spending "extra" over each of the next 10 years. Does that sound right? If so, it means this conversion program is more affordable than I prreviusly thought.
The question is: does the above method properly use Firecalc to simulate the tax payment effect of my proposed 10-year Roth conversion plan? Am I making any mistakes here? I really appreciate any comments and suggestions on how to use Firecalc as accurately as possible for the scenario as set forth above. Thanks a lot, everyone, for all your help!
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